GBP/USD outlook unchanged, potential for extra upside – UOB

FX Strategists at UOB Group remain neutral on Cable although further near term upside cannot be ruled out.

Key Quotes

24-hour view: “In line with expectation, GBP traded mostly sideways last Friday albeit at a narrower range than anticipated. ‘Flat’ indicators continue to suggest range trading for now, likely between 1.4120 and 1.4200”.

Next 1-3 weeks: “We indicated yesterday that further GBP strength cannot be ruled but noted that it would be “surprising if GBP can move above the February’s peak near 1.4280 (1.4230 is already quite a strong resistance)”. GBP popped briefly to a high of 1.4220 before dropping sharply to end the day on a soft note. The price action reinforces our view even though as mentioned yesterday, GBP is expected to continue to stay underpinned as long as the key support at 1.4000 is intact. In the meanwhile, shorter-term indicators are unwinding from oversold conditions and GBP is expected to trade sideways at these higher levels for the next few days”.